The key points of Buffett’s shareholder meeting have arrived! Responding to reducing Apple holdings and huge cash reserves

The investment industry’s Spring Festival Gala has arrived.

On May 4th at 22:15 Beijing time, the annual shareholder meeting of Berkshire Hathaway was held in the small town of Omaha, USA.

Unlike previous years, this year’s conference marks the first time Warren Buffett, the stock god, has made a solo appearance after his former partner Munger passed away. Along with him, there were also Greg Abel, the leader of Berkshire’s non insurance business, and Ajit Jain, the leader of the insurance business, who faced shareholder questions.

At 9 o’clock that day, Apple CEO Tim Cook appeared at the conference. He said in response to questions from First Financial reporters that he really enjoyed his trip to China, “it’s great!”. It is reported that since his first participation in 2019, Cook has been a frequent guest at shareholder meetings.

On the eve of the opening ceremony, Berkshire Hathaway, a subsidiary of Buffett, released a performance announcement.

On May 4th, Buffett’s Berkshire Hathaway announced that its revenue for the first quarter of 2024 was $89.869 billion, a year-on-year increase of 5.2%. The market expectation was $85.92 billion, compared to $85.393 billion in the same period last year; The net profit in the first quarter reached 12.702 billion US dollars, a year-on-year decrease of 64.2%. The market expectation was 9.892 billion US dollars, compared to 35.504 billion US dollars in the same period last year. The company repurchased $2.6 billion of common stock in the first quarter, compared to $2.2 billion in the previous quarter. The total amount of stock repurchases for the entire year of 2023 reached $9.2 billion.

By business segment, the revenue from insurance and other businesses was $65.473 billion, compared to $63.457 billion in the same period of 2023. The revenue from the railway, utilities, and energy businesses was $24.396 billion, compared to $21.936 billion in the same period of 2023.

At the shareholder meeting, Buffett successively discussed issues such as his friend Munger, reducing his holdings in Apple, cash reserves, and AI. The following are the main contents of the conference:

Buffett requested to turn on the venue lights for Munger

On May 4th, after the Berkshire annual meeting short film ended, Buffett requested staff to turn on the lights of the venue for the late Charlie Munger. About 30000 shareholders stood up at the scene to applaud Munger and pay tribute to Buffett’s business partners for over 60 years. Afterwards, Buffett stepped onto the stage to begin the Berkshire Hathaway Annual Meeting.

Buffett answers the first question: Will he continue to invest in China?

The first question in the Q&A session of the shareholder meeting was raised by a shareholder from Hong Kong, China: “Mr. Buffett, Berkshire has previously invested in BYD. Will you continue to invest in other companies in China in the future?” Buffett replied, “Our main investment target will be in the United States, which we firmly believe. You can see that the Coca Cola or American Express we invest in are companies that expand their business globally. Companies like American Express or Coca Cola, which have business worldwide, are difficult to find globally, which is a global consensus. And I think the investment in BYD is quite similar to the investment we made in Japan five years ago: we quickly invested in five companies in Japan, and you rarely see us making such investments overseas in the United States, even though we are participating in the world economy through these companies. I understand the rules, weaknesses, and strengths of the United States… I don’t have this feeling in other parts of the world

Buffett responds by reducing his holdings in Apple stocks

On May 4th, 2024, during the live broadcast of Buffett’s shareholder meeting, Buffett responded to the issue of reducing his holdings in Apple stocks. He said that we still have a lot of Apple stocks. At the end of this year, Apple was the largest holder of common stock in our history. Charlie and I both look at the equity of these common stocks, and we consider them as businesses, not just stocks. We also have stocks of Ice Queen, and we see it as a business, as a company. We can buy a great company, but we can’t buy all or over 80% of their shares.

When we examine Apple, American Express, and Coca Cola, we see them as companies. Of course, there are some differences in tax, management, and other factors, but when we allocate funds, we look at each company, not just as an investment in stocks. We don’t want to predict the market, we don’t just choose stocks.

Buffett said Munger patted the table and asked him to buy BYD

On May 4th, at Buffett’s 2024 shareholder meeting, Berkshire Hathaway Chairman Buffett said that Charlie Munger had always followed his advice and agreed to his proposals, but only had two instances where he was asked to “buy buy buy!”, one time by investing in BYD and the other in Costco. Buffett believes that Charlie Munger was right in investing in both companies at crucial moments.

Buffett responds to huge cash reserves

On May 4th, at Buffett’s 2024 shareholder meeting, he stated that at the end of Q1, Berkshire’s total cash and Treasury bills exceeded $180 billion. He believed that by the end of this quarter, the company’s cash and Treasury bills would reach $200 billion, which is a reasonable assumption. They really want to spend this money, but they won’t spend it unless they think the risk of what they are doing is minimal and can bring significant returns.

Buffett has invested approximately $159 billion in AI concept stocks

In 1940, Buffett’s father, Howard Buffett, visited the New York Stock Exchange at 11 Wall Street in New York with his 9-year-old son. The bustling trading lobby left a deep impression on the young Buffett, leading him on a journey of investment enlightenment as a stock god. Two years later, 11 year old Buffett bought his first stock in life.

New York Stock Exchange trader Peter Tuchman, who has been trading stocks on the New York Stock Exchange for nearly 40 years, had the privilege of meeting the “stock god” several times. He described the meeting to First Financial reporters and discussed whether value investing is still applicable in the current era of high valuations and technological changes? Has Buffett, who has a relatively conservative investment style, missed out on artificial intelligence (AI)? Can investors place orders without thinking about Buffett’s preference?

Buffett said that he cannot estimate the prospects of artificial intelligence, as it has great potential, but its development makes me nervous.

Buffett claimed to have paid over $5 billion in taxes last year

On May 4th, at Buffett’s 2024 shareholder meeting, Berkshire Hathaway Chairman Buffett stated that he hopes Berkshire can pay a large amount of taxes. Last year, taxes exceeded 5 billion US dollars. If 800 other companies were to do so, then the United States would not need anyone else to pay taxes.

Buffett mistakenly called his partner Munger

At the Buffett shareholders’ meeting, sitting next to Buffett is “Buffett’s successor” and Berkshire Vice Chairman Greg Abel. Buffett habitually called out “Charlie (Munger)”, and Buffett said, “I’m sorry, I’m still called Charlie. Now, let’s ask Greg to answer. My name is Charlie.”. Actually, I am already on the alert not to call the wrong person, but sometimes I still slip my tongue.

Buffett said he cannot estimate the prospects of artificial intelligence

On May 4th, 2024, during the live broadcast of Buffett’s shareholder meeting, Buffett responded to the issue of the advantages of artificial intelligence. He said, “I know nothing about AI artificial intelligence, but it doesn’t mean that this technology is not important.”. Last year, I also mentioned that we have made elves jump out of bottles, especially when we invented nuclear weapons before, they are now doing some bad things. The power of elves sometimes makes me feel scared, and it can no longer be stuffed back into the bottle. I think AI has some similarities and has already made it stand out. Of course, it is very important and has a significant impact on many people. But we hope this elf can do good in the future, I cannot evaluate it.

AI certainly has the potential to do good, but the examples I just mentioned and some phenomena I have witnessed before may be a bit scary, and even after seeing this photo, I find it difficult to distinguish between true and false. So, like nuclear technology, the elves have already been released from the bottle, and I know nothing about it. I think AI has great potential to do both good and bad things, and I can only let it happen naturally in the future.

Buffett claims that paying attention to stocks every day doesn’t actually make money

On May 4th, during the live broadcast of the 2024 Buffett Shareholders Meeting, Buffett stated that based on the situation in the past five years, we cannot issue as many stocks as other companies. We have so many investors and need to control the number of circulating shares.

Investors don’t want to sell our stocks, or they don’t pay attention to their prices every week. People who pay attention to stock prices every day can’t make money. Many times, when people buy our stocks, they put them there and don’t even read too much. This is the story of Berkshire’s past.

Buffett stated that he currently has no plans to invest in BYD

Buffett answered the first question at the shareholders’ meeting: “Berkshire has previously invested in BYD. Will you continue to invest in other companies in China in the future?” Buffett stated that his main investment targets will be in the United States, which is firmly believed. Companies like American Express and Coca Cola may not be able to find comparable targets globally. Regarding his investment in BYD, Buffett stated that it is similar to Berkshire’s investment in Japan five years ago, when he spent a year investing in five important Japanese companies. “Looking back, this is radical. I should have been more radical, but I didn’t. We have considered many companies such as BYD, but the company has not yet had such plans. Of course, this is not impossible. The situation is different in every place, and the company cannot tolerate losing money.”

Buffett claims that the Munger philosophy keeps him making money

On May 4th, 2024, during the live broadcast of Buffett’s shareholder meeting, Buffett was asked what he would like to do if he could spend another day with Munger? He said that Munger loves learning very much, and I also heard in the short film just now that he is interested in many things. His interests are much broader than mine. He is not like me, and I don’t want him to be like me. However, we are very like-minded when we are together. We do many things together, play tennis, golf, and many things together.

But we still have to work together, overcome difficulties together, have Charlie as a partner, help us overcome various difficulties together. These decades have really made me very happy, and he gave us many ideas ten years ago, constantly making us profit.

Buffett: If I were interested in fraud, AI would be a big development area

On May 4th, at Buffett’s 2024 shareholder meeting, Berkshire Hathaway Chairman Buffett stated that if I am interested in fraud, AI will be an area with great potential for development. I have no suggestions for AI, and I believe that if we don’t have fear, we won’t be able to cope well. He believes that AI has enormous potential to do good and also to do bad.

Buffett said he wants to deal with the right people

On May 4th, 2024, during the live broadcast of Buffett’s shareholder meeting, when asked what you think each of us needs to hear the most, Buffett said, “I would like to use Charlie Munger’s previous advice, just like I was reading his eulogy.”. “Firstly, do a good job in education and deal with the right people based on your personal situation.”

The world you are in is the best ever. You also need to find activities that you love to participate in, find like-minded people to share the luck this world brings you. Charlie and I are like this. We have found each other, we have found common interests. If you can’t find them now, let’s continue to search. I have been telling my students to find the job you want. Sometimes you can find a job you love very early, and sometimes you have to search for it for a long time, but don’t forget your original intention.

Buffett: I will listen to my wife, but I am more willing to discuss financial management with Munger

On May 4th, at Buffett’s 2024 shareholder meeting, Berkshire Hathaway Chairman Buffett stated: “I completely trust my child and wife, but that doesn’t mean I’m asking her what stocks to buy. In terms of finance, there’s no better person to discuss than Charlie Munger in the world.”.

Buffett’s response on whether it is possible to invest in India

On May 4th, 2024, during the live broadcast of Buffett’s shareholder meeting, Buffett answered whether it was possible to invest in India. He said that we are paying attention to India, and I believe there are many opportunities in India. However, my question is whether we have any advantages in our insights in India, and whether our investment may be something that India really wants us to participate in.

Buffett claims to only choose opportunities he enjoys

On May 4th, at Buffett’s 2024 shareholder meeting, he stated that for large-scale mergers and acquisitions, he will only choose opportunities that he enjoys.

Regarding the question of why cash, which has already exceeded 182 billion, is not allocated, Buffett stated that he should only strike at the right time. If we set our previous goals now, we may not be able to find so many opportunities. There are not enough investment targets right now, not enough attractive ones. Let me allocate assets and see if there are any changes afterwards. Let’s wait and see.

Why hold over $180 billion in cash without investing? Buffett: Only swing a shot at the right time

On May 4th, at Buffett’s 2024 shareholder meeting, Berkshire Hathaway Chairman Warren Buffett explained why he was not in a hurry to tap into the company’s massive cash reserves of over $180 billion. Buffett stated that he would not use the money at such a high interest rate of 5.4% and would only strike it at the right time.

Buffett claims he doesn’t buy houses frequently

On May 4th, 2024, during the live broadcast of Buffett’s shareholder meeting, regarding the question of whether to consider Berkshire agents when buying a house, Buffett stated that he did not buy a house so frequently and the possibility of investing in real estate in the future should be very low.

Buffett claims to have reduced his holdings of Apple for tax reasons

On May 4th, during the live broadcast of Buffett’s 2024 shareholder meeting, when asked why Berkshire had reduced its investment in Apple, Buffett stated that this was due to tax reasons, as the investment had yielded substantial returns, rather than his long-term judgment of the stock. He also stated that this may be related to his personal opinion that US tax rates will increase to fund the expanding US fiscal deficit.

Buffett claims Munger will always be honest

On May 4th local time, Berkshire Hathaway’s annual shareholder meeting was held in the small town of Omaha, USA. During the investor questioning session, Buffett once again mentioned Munger. He said that Munger is a trustworthy business partner, but he can also seek support from others or places. Buffett said Munger is always honest, which is also part of the reason why he became an important partner. Buffett added that this applies to his work and personal life.

Buffett explains why he is not in a hurry to use his cash reserves

On May 4th, at Buffett’s 2024 shareholder meeting, Berkshire Hathaway Chairman Warren Buffett explained why he was not in a hurry to tap into the company’s massive cash reserves of over $180 billion. Buffett stated that he would not use the money at such a high interest rate of 5.4% and would only strike it at the right time.

Buffett claims that artificial intelligence is similar to nuclear weapons

On May 4th, at Buffett’s 2024 shareholder meeting, Berkshire Hathaway Chairman Warren Buffett said that I have no knowledge of artificial intelligence, but this does not mean that this technology is not important. When we first invented nuclear weapons, we had already made elves jump out of the box, and I think artificial intelligence is also in a similar situation.

Buffett said he missed out on many opportunities with Munger

On May 4th, during the live broadcast of the 2024 Buffett Shareholders Meeting, Buffett stated that Charlie and he had missed a lot of opportunities, and the real regret was that they may have missed some very big investment opportunities, but these opportunities are something they understand. When they miss out on investment opportunities in industries they don’t understand, they won’t feel regretful at all.

Buffett’s response to when he will sell stocks

On May 4th, at Buffett’s 2024 shareholder meeting, regarding the decision-making factors for selling stocks, Buffett stated that there are often many reasons for reducing positions, one of which is that you need cash. This situation is not common for Berkshire, but since he started investing at the age of 20, this situation has occurred every time he made a decision.

Buffett on Apple: Consumers may not necessarily be able to afford a second car, but they may be able to afford a second iPhone

On May 4th, at Buffett’s 2024 shareholder meeting, Berkshire Hathaway Chairman Warren Buffett gave an example when talking about investing in Apple: you may be able to afford a second iPhone, but not necessarily a second car. The value of a second car is 20 times higher than that of a second phone. Although Buffett is not sure how the iPhone works, his insight into consumer behavior convinced him that the iPhone is a very great product, and perhaps even the greatest product ever, and its value is far underestimated. Meanwhile, Buffett also praised Cook for his excellent work at the helm of the company and for being a great partner.

Buffett claims that hedge fund index funds are too greedy

On May 4th, at Buffett’s 2024 shareholder meeting, Berkshire Hathaway Chairman Warren Buffett stated that he and Charlie Munger both believe that working with such a selfless and dedicated group of people is very enjoyable, rather than someone like hedge funds and index funds who may be too greedy for money. Seeing what Berkshire Hathaway shareholders are doing will restore confidence in humanity.

Who will take over Berkshire’s investment decisions? Buffett’s response

When asked about the allocation of rights and responsibilities between Abel and his two investment deputies, Todd and Ted, after taking over Berkshire, Buffett stated that this decision would be left to Berkshire’s board of directors. When he is gone, he may try to “come back and see if they have different approaches.”.

But Buffett emphasized that if he were on the board at that time, he might have left the responsibility for capital allocation to Abel based on his understanding of the business, as he had a strong understanding of it. Buffett said that if you understand a company, you will understand stocks. If you really know how a company operates, you are an investment manager. Buffett stated that the responsibility he bears now should be entirely borne by the next CEO, namely Abel.

Buffett advises not to be too harsh on oneself

On May 4th, at Buffett’s 2024 shareholder meeting, he stated that we all have our own weaknesses and flaws, and we should not be too harsh on ourselves. But you cannot completely relax, because you can change the future.

Munger actually used human misjudgment psychology several times before

On May 4th, at Buffett’s 2024 shareholder meeting, Berkshire Hathaway Chairman Warren Buffett mentioned an interesting story about Munger. Munger once proposed 25 reasons for human misjudgment psychology standards, revealing why humans are easily manipulated or fooled. To become a good insurance broker or an excellent Wall Street manager, if you can understand where others are weak, you will truly become very wealthy. Buffett even said that Munger had admitted to using such psychology once or twice, and although he was not proud of it, he did taste the sweetness, but he did not intend to continue using it.

Buffett said the best technique is to avoid risks

On May 4th, 2024, during the live broadcast of Buffett’s shareholder meeting, Buffett stated that luck plays a very important role. Some people always have bad luck, and he said his best skill now is to avoid risks and misfortune, which is his best skill. That’s why he has the situation he has today.

Buffett said there will be no change in investment philosophy

Buffett stated that his investment philosophy will not change in any way and he does not want others to worry about whether he can beat the S&P index. He also expressed that he is very happy with the current situation and hopes to understand it, find better ways to use the best resources in the right places, and solve the most pressing problems in the world.

Buffett’s sister was also urged to get married when she was young

On May 4th, at Buffett’s 2024 shareholder meeting, Berkshire Hathaway Chairman Warren Buffett stated that when my sister was in school, her family hoped that she would get married quickly before she became ugly, and even get married while she was in school because all the good men were taken away by graduation. For many women like my sister, that was the society at that time. It is incredible that we have made such great progress now.

Buffett called the iPhone a great product

On May 4th, during the live broadcast of the 2024 Buffett Shareholders Meeting, Buffett stated that the iPhone is a very great product, perhaps the greatest product in history, and its value is far underestimated. Cook is also an outstanding partner like Steve Jobs, and he worked exceptionally well at the helm of the company.

Buffett: Berkshire has liquidated Paramount shares at a loss

Buffett stated that he has sold all shares of Paramount Global at a loss. He said, “This is completely my decision. We have sold everything and lost a lot of money.” Buffett added that this experience has made him think more deeply about what people prioritize in their free time.

Buffett: I hope to be able to attend the conference again next year

The 2024 Buffett Shareholders Meeting has ended. Buffett: We have only answered about 30 questions today, but thank you all for coming all the way here to attend. We also welcome everyone to attend next year. Of course, first of all, I want to ensure that I can still attend next year.

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